In their last debate in the Virginia Senate race, George Allen and Tim Kaine clashed over how to avoid some $55 billion in mandated defense cuts set to begin Jan. 1. Allen would take more from social programs; Kaine would raise taxes on the wealthiest Americans.

Democratic candidate for the US Senate seat from Virginia, former Gov. Timothy Kaine (l.), speaks as his Republican rival, former Sen. George Allen (r.), takes notes during a debate at Virginia Tech in Blacksburg, Va., on Thursday.

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BLACKSBURG, VA. — As Republican George Allen and Democrat Tim Kaine head down the final stretch of their heavyweight brawl to be the next US senator from Virginia, the close race may come down to an issue that has received scant attention at the presidential level: some $55 billion in defense cuts nationwide that will slam Virginia's economy come Jan. 1.

Former Virginia Governors Kaine and Allen had an extended and tense exchange in Blacksburg, Va., Thursday night over how to deal with those cuts, which Congress put in place as part of compromise legislation from the summer of 2011 that raised the federal debt ceiling.

Polls consistently show the candidates within only a few percentage points of each another, as the Senate race here has largely tracked alongside the presidential contest in the commonwealth, one of 2012's most highly sought after electoral prizes.

In the fifth and final meeting between the two men, this "sequester" of military funds was the spoke around which the other arguments revolved. Allen uses it to paint Kaine as weak on defense and to highlight his own support for greater utilization of energy resources to help pick up the tab of government spending.

Kaine uses it to showcase the specificity of his plan to solve the crisis, while criticizing Allen's spending-cuts-only approach as evidence that the Republican lacks, both personally and in policy, the balance to find a solution.

This issue, which bled through questions as far afield as Libya and Medicare, has so far not come up at all during the presidential debates.

At issue is a deal struck by Republicans and Democrats last summer that created some $1.2 trillion in automatic spending cuts (known in Washington as the "sequester") over the next decade, to be split evenly between defense and nondefense discretionary spending, if a special panel of lawmakers couldn't find another way to achieve the same amount of deficit reduction.

That panel, like so much else in Congress, was deadlocked and failed.

That failure, paradoxically, gave birth to an issue that both Kaine, a former Democratic National Committee chairman, and Allen, who is attempting to be just the third senator in the past half-century to reclaim a Senate seat, will dispute across Virginia in the campaign's waning weeks.

On Thurday night, battle lines between the two camps were clearly drawn.

Allen ripped Kaine for supporting last summer's deal. "I could never imagine myself voting for something that could be so potentially harmful for military readiness and jobs in Virginia," Allen said. "You cannot avoid the fact that the secretary of Defense said this would be devastating to our military."

Allen said he would look first to a House-passed replacement for the sequester that staved off cuts to defense by loading up on other reductions, such as education, social services, and federal employees. Then, as he pointed out both during and after the debate, he calls for accessing more of America's energy, thus reaping more royalties for the federal government to help defray the cost of undoing the sequester.

Additionally, Allen argued that Kaine was using the potential job loss as leverage to allow the Bush-era tax cuts to expire on incomes over $500,000. Kaine has proposed offsetting part of the cost of the sequester by letting the Bush tax cuts expire for such households.

"I think it is very wrong to be using the 200,000 men and women in Virginia whose jobs are threatened by this sequestration deal that I have opposed.... They should not be used as a political bargaining chip to be used to raise taxes on job creators and small businesses."

Kaine lit into Allen for any suggestion that Kaine, the father of a newly minted US Marine officer, would use military spending as a negotiating tactic.

"George, you just started your answer by saying I'm trying to hold the military hostage to raise taxes – you and I are both fathers, and this one is very personal to me. I have a son who has just started a career in the military. I will not do things that will hurt the troops or hurt defense," Kaine said.

The question of "holding hostage" was one Kaine seized on, using it to hammer Allen for what has been a long-running subtext of Kaine's critique of his Republican opponent: Not only are his policies lacking balance in the form of some taxes and some spending cuts, Kaine implies, but Allen himself is prone to divisive rhetoric that won't help get things done in Congress.

"Saying that somebody is going to hold the military hostage is like saying that 'Oh, someone is anti-Virginia if they support the president of the United States.' It's exactly the kind of rhetoric that we need less of, not more of, in Washington," Kaine said. He also noted the original sequestration bill had GOP support from House Speaker John Boehner, Virginia Gov. Bob McDonnell (R), and the US Chamber of Commerce, a frequent backer of Republicans.

"We were trying to avoid a fiscal collapse, but George Allen and a few other people stood outside, shook their fists, and said, 'We don't support a compromise,' " Kaine said. "We can avoid these defense cuts, but we can only avoid them with a compromise."

Kaine laid out a plan that he said would reduce the amount of cuts needed to offset the sequester by about 75 percent. It included the expiration of tax cuts for those making over $500,000 a year , the end of subsidies to large oil companies, and a policy change to allow Medicare to negotiate with drug companies on prices for prescription drugs.

Allen and Kaine each painted himself as a bipartisan solution-seeker, with Kaine pointing to his work with President George W. Bush and Allen referencing a gubernatorial record that included a trio of reforms in education, parole, and welfare with a Democratic-controlled legislature.

"Each of them have a similar obstacle to overcome: their recent past," says Bob Holsworth, a Virginia political analyst who moderated a previous debate between the two candidates. "Allen has to overcome the fact that he spent six years in the Senate and was not known as a [bipartisan] member.... And Kaine, the apostle of bipartisanship, just finished a stint as the head of the Democratic National Committee, as partisan-in-chief."